More local and regional jurisdictions are seeking to deal with litter and solid waste by embracing “Extended Producer Responsibility” (EPR) laws that place the responsibility for waste minimization on product manufacturers.

Until recently, EPR initiatives mainly focused on bottle deposit laws, recycled content requirements, or mandatory “take-back” programs. The impact of new costs and fees imposed on consumer product companies will have repercussions up the supply chain to packaging producers, including converters. A case in point is Ontario's Blue Box Waste Program.

In 2002 the Ontario Parliament enacted the Waste Diversion Act (WDA), which requires all companies that introduce packaging and printed paper into Ontario to fund 50% of the province's “Blue Box” municipal waste diversion program. Fees are imposed against “Stewards,” meaning the brand owner, first importer, or franchiser that generates Ontario sales in excess of $2 million Canadian and whose product, related packaging, or printed material (including newspapers) generates more than 15 tons annually of “Blue Box” wastes as defined by the Ontario Ministry of the Environment. Pursuant to the Act, Ontario Regulation 273/02 defines “Blue Box” wastes broadly as wastes that consist of any combination of glass, metal, paper, plastic, or textiles.

The Act also established Waste Diversion Ontario (WDO), a non-government corporation whose board of directors consists of industry, municipal, and non-governmental representatives, to develop and administer the Blue Box waste program. WDO defined Blue Box packaging subject to fee payments “largely based on the European Parliament and Council Directive on Packaging and Packaging Waste (94/62/EC)” to include the following:

Sales of primary packaging

Purchased by consumer (e.g., cereal liners, a water bottle with lid, plastic wrapping around a clock-radio in its box, or decorative tins and chocolate boxes);

Secondary packaging

Goes home with the end-user and often is used to group units or provide a second level of packaging (e.g., cereal boxes, shrinkwrap around beverage six-packs, or cartons used to package electronics);

Service packaging

Usually provided or filled at the point of sale and for the end-user (e.g., grocery bags, bulk goods bags, fast food containers);

Transportation, distribution packaging, or tertiary packaging

Larger, more durable materials that may have been used for transportation but are designed to be delivered to consumers (e.g., a “club-pack” box of cereal, a corrugated flat holding multiple beverage six-packs sold as a unit, or furniture or computer packaging).

In other words, packaging placed in the residential waste stream by a consumer is subject to the Blue Box program. Other packaging, i.e., wrapping removed by the retailer before a product is placed on shelves, specifically is excluded.

The Blue Box Program plan was approved by the Ontario Minister of the Environment Dec. 22, 2003, and went into effect February 1. About 20,000 companies potentially obligated to contribute packaging fees were encouraged to appoint a primary contact to pre-register the company with Stewardship Ontario, an organization established by WDO to administer and collect the packaging fees.

Companies have 90 days from the date they are notified officially by Stewardship Ontario to register, calculate their fees, and submit payment to Stewardship Ontario. Individuals who violate the Act are subject to daily fines not to exceed $20,000; corporations are subject to fines as high as $100,000 for each day of violation.

Stewardship Ontario has designated fees for funding Ontario's municipal waste diversion program based on three factors:

the recovery rate of a particular waste in a particular year;

the net cost of recycling each material through municipal Blue Box programs in a given year;

the “disproportionate contribution” made by some Blue Box wastes to diverting wastes from disposal successfully.

First-year fees were highest for plastic packaging wastes produced in 2002 and 2003 (6.692 cents/kg waste generated), including PET bottles, HDPE bottles, plastic film and plastic laminates, PS, and “other plastic.” Stewardship Ontario recently has proposed to increase the fees for such wastes by 43.6%. The program seems to adopt a preference in terms of fees for materials being successfully recycled, with possible implications for source-reduced packaging products.

Sheila A. Millar, a partner with Keller and Heckman LLP, counsels both corporate and association clients. Contact her at 202/434-4143; This email address is being protected from spambots. You need JavaScript enabled to view it.;PackagingLaw.com.